Our 2025 Review on Critical Illness (CI) coverage: Minimise your lifetime premium on your CI plan with this guide

What is critical illness insurance?

Critical illness (CI) insurance offers financial protection if you are diagnosed with a critical illness. Such plans include coverage for the 37 standard critical illnesses as defined by the Life Insurance Association Singapore (LIA) and may also cover for up to 158 conditions (covering specified early or intermediate stages critical illnesses). Upon diagnosis of a covered condition, a lump sum payout is provided to the insured to cushion the financial impact.

Critical illness coverage can be obtained from standalone CI plans, or by attaching early critical illness (ECI) riders to your term or whole life plans. In this article, we share the different options for critical illness coverage and our recommendation on what we feel is the optimal approach to getting critical illness coverage.

1. Standalone Critical Illness (CI) plans

There are two types of coverage offered from standalone critical illness plans:

1. Critical illness plan that provides a single pay-out offers a one-time pay-out for specified critical illnesses. For most plans, this means a 100% pay-out of the sum assured for early, intermediate, and advanced stage critical illness up to the specified policy limits. These plans only cover for a single critical illness, and coverage will cease once the sum assured reduces to zero.
2. Critical illness plan with multiple pay-outs provides multiple pay-outs for different critical illnesses, ensuring that you remain covered even after the first critical illness strikes. These plans provide continued coverage after the first claim, allowing for subsequent claims for different specified critical illness. Depending on the insurer’s terms, you may potentially receive a total pay out of up to 10 times your sum assured.

Premium illustration for standalone critical illness plans

Profile: Age 30 (birthdate 1 January 1995), non-smoker Singaporean male residing in Singapore

⭐ For low upfront premiums: TM Early Cover (standalone single pay-out critical illness plan)

As shown in the table above, premiums for a standalone single payout critical illness plan are generally lower with TM Early Cover offering the most competitive initial premium at $1,875 a year. This is approximately 40 per cent cheaper than the multiple pay-out critical illness plans.

2. Critical illness riders

Critical illness riders are optional benefits that can be added to term life or whole life plans to provide coverage for critical illnesses. Such riders offer comparable coverage to standalone single pay-out critical illness plans but has the added advantage of being a dual-purpose plan by providing both death or Total Permanent Disability (TPD) coverage and critical illness protection. Additionally, the total lifetime premiums paid for critical illness riders may also be lower than those paid for standalone critical illness plans.

There are two types of critical illness (CI) riders: accelerated and additional.

Accelerated CI riders accelerate a portion of the death benefit for pay-out in the event of a critical illness claim. This means that benefit paid out from your critical illness coverage will reduce your death benefit.

Additional CI riders provide a separate benefit that will not reduce the death benefit in the event of a claim. However, additional CI riders are generally less common and typically have higher premiums due to the added coverage

💡Tip: Critical illness riders that pay on an additional basis offers more coverage. However, such plans may end up being more expensive.

As shown in the table below, term life insurance with an early critical illness (ECI) rider given on an additional basis will provide $250,000 ECI coverage, and $250,000 death and TPD coverage. Annual premiums for this option work out to $2,459.95 a year, with the total lifetime premiums payable amounting to $95,938.05.

However, if we were to use two separate plans for coverage instead – (1) a term life plan and (2) a standalone single pay-out critical illness plan, the individual would receive a total of $250,000 ECI coverage, and $270,000 death and TPD coverage. Not only will the individual have a higher death coverage, but the annual premiums will also be lower at $2,357.45 a year, or a total lifetime premium of $91,940.55.

Premium illustration for term or whole life plan with early critical illness riders

Profile: Age 30 (birthdate 1 January 1995), non-smoker Singaporean male residing in Singapore

⭐ For low total lifetime premiums: Manulife LifeReady Plus II + Early Critical Care Rider III with multiplier (Critical illness rider attached to a whole life plan)

While whole life plans with an attached early critical illness (ECI) rider have higher initial premium, the total lifetime premium for such plans are lower than that of a term life plan with ECI rider. This can be seen in the table below where Manulife LifeReady Plus II with ECI has a total lifetime premium of $57,246.60, as compared to $73,125.00 for TM Early Cover (a standalone single pay-out critical illness plan). This represents a difference of $15,878.40 in total lifetime premium, or approximately 22 per cent in savings by opting for Manulife LifeReady Plus II with ECI rider instead of TM Early Cover.

If you prefer to pay less total lifetime premiums and are comfortable with paying a slightly higher initial premium, then this option of adding an ECI rider to a whole life plan may be suitable for you.

⭐ Alternatively, if you only intend to have coverage until age 70: Singlife Whole Life Choice + TPD Advance Cover V + Early Critical Illness Advance Cover VI with multiplier (Critical illness rider attached to a whole life plan)

If you only require critical illness coverage up to age 70, and intend to surrender your policy after, you may consider the Singlife Whole Life Choice option. While the initial premiums and total lifetime premiums are higher than Manulife LifeReady Plus II and TM Early Cover, Singlife Whole Life Choice has a higher guaranteed surrender value at age 70. This allows you to get back $30,550 if you no longer need coverage and surrender your plan then.

This guaranteed surrender value effectively reduces the actual cost of your insurance with Singlife Whole Life choice amounting to $35,100 if we take into consideration the guaranteed surrender value at age 70. This is significantly lower than the single pay-out CI plan (TM Early cover) with a total premium of $73,125, or the other whole life with ECI rider option (Manulife Life Ready)’s actual cost of insurance of $40,496.60.

This means that Singlife Whole Life Choice may be a better option if you are comfortable with the higher initial premiums needed and intend to surrender the plan and cease coverage at age 70.

💡 Tip: Consider surrendering your whole life plan with ECI rider once your plan’s multiplier expires (and coverage reduces) if you no longer require the coverage. This allows you to receive a lump sum surrender value that you can use for your hospital insurance plans (i.e. integrated shield premiums).

Other considerations:

While term plans are an affordable option for death coverage, adding a ECI rider to your term plan may not be the cost-efficient option for getting critical illness coverage.

Although upfront premiums for whole life plans with ECI riders may appear higher, they are often paid over a shorter period (e.g., 10, 15, or 20 years) as compared to term life plans. This is known as a limited pay plan and can lead to lower total lifetime premiums paid as you are paying for lifelong coverage in a shorter timeframe.

Likewise, while standalone multiple pay-out critical illness plans offer coverage for multiple critical illness claims, such plans tend to cost more. Carefully evaluate the cost of your premiums when looking for a multiple pay critical illness plan as the premiums could cost twice as much as other critical illness coverage options.

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^{Information obtained from:}

^{https://www.lia.org.sg/media/4253/for-lia-mu-5824-part-2-of-4-_lia-ci-framework-2024_definitions-for-37-cis.pdf}

^{Information retrieved on 12 February 2025.}

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